Representatives from the Campaign for College Affordability issued a report yesterday explaining the group’s support for President Barack Obama’s budget proposal, which, if passed, would increase direct federal financial aid to students.

In a conference call with reporters yesterday Christine Lindstrom, director of the U.S. Public Interest Research Group’s Higher Education Program, and a member of the Campaign for College Affordability said the federal student aid program requires dramatic reconstruction.

“This is a stepping stone. The Obama budget takes into consideration that this is an initial investment,” Lindstrom said. “More needs to be done.”

Obama’s budget proposal calls for an end to the Federal Family Education Loan Program, which provides subsides to banks that loan to students. Instead, all federal student loans would be issued through the Department of Education’s Direct Loan Program, according to the report, Obama’s Budget: Supporting Students, Not Banks.

The Department of Education predicts an increase of $5 billion to the Federal Pell Grant Program in the 2010-2011 school year, taken directly from money previously given to banks.

In Michigan, 181,767 students received Pell Grants. Obama’s proposal would provide for an additional 9,172 recipients in Michigan and increase the average total awarded by $114, according to research by U.S. PIRG.

In 1977, the Pell Grant covered 77 percent of the total cost of college for low-income students according to research by U.S. PIRG. Today, the grant covers 35 percent of the total costs.

Obama’s proposal attempts to safeguard the program from falling behind the rising costs of tuition, Lindstrom said. She said she thinks the change will allow the grant to stay useful for years to come.

“Specifically, the budget actually proposes indexing (the Pell) grant to inflation so it increases by inflation plus one each year after,” Lindstrom said. “That’s currently not how the Pell Grant works and that will help the Pell Grant stay viable.”

The average tuition for a four-year public university in Michigan increased by 11 percent between the 2006-2007 to the 2007-2008 school years.

In the report, Campaign for College Affordability officials also expressed their support for programs to help students who have graduated repay their debt.

Robert Brandon, of the Campaign for College Affordability, said on the conference call that high debt discourages college graduates from entering typically lower-paying, yet extremely important career fields like teaching and social work.

Brandon said increasing programs to help students who have graduated repay their debt, like the Income-Based Repayment Program, which will allow students to pay back only as much as they can afford according to their income, will help to open up opportunities for graduates. The Department of Education will implement this program starting July 1.

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